Raising or eliminating the cap on wages that are subject to taxes could reduce the long-range deficit in the Social Security trust funds. For example, phasing in an increase in the maximum taxable earningsto cover 90% of earnings over the next decadewouldeliminateroughly 30% of the long-range shortfall in Social Security. If all earnings were subject to the payroll tax, but the current-law base was retained for benefit calculations, the Social Security trust funds would remain solvent for over 60years. However, having different bases for contributions and benefits would weaken the traditional link between the taxes workers pay into the system and the benefits they receive.

I guess you also want to just do it - take it now, don't plan or wait or ease it in, irregardless of how it affects people, their employers or our economy.

Like I said before - I thought the goal was not just to make it solvent for 75 years or more, I thought it was to improve the program too.

Personally, I like this one - Social Security 2100 Act by Rep John Larson, Senators Richard Blumenthal, and Chris Van Hollen

This one works to fix the solvency issue and gives other benefits that many seem to want who post here. Here is a short summary of each provision. What don't you like??? The increase in the combined OASDI payroll tax rate from 12.4% to 14.8 percent is only increased by 0.1 percentage point each year for almost 25 years - That's about 50 cents a week more for the average wage earner.

Social Security 2100 Act -

H.R.860 — 116th Congress (2019-2020)

S. 269 - Senate identical bill

The proposal includes eight provisions with direct effects on the OASDI program. The following list briefly identifies each provision of the proposal:

Section 101. Increase the first PIA formula factor from 90 percent to 93 percent for all benefits payable for months of entitlement January 2020 and later, including benefits for those becoming newly eligible both before and after January 2020.

Section 102. Use the Consumer Price Index for the Elderly (CPI-E) increase rather than the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increase to calculate the cost-of-living adjustment (COLA), effective for December 2019 and later COLAs. We assume this change would increase the COLA by an average of 0.2 percentage point per year.

Section 103. Increase the special minimum PIA, beginning for workers who become newly eligible for retirement or disability benefits or die in 2020 or later. For workers becoming newly eligible or dying in 2020, the minimum PIA for 2020 for workers with 30 or more years of coverage (YOCs) is 125 percent of the annual poverty guideline for a single individual published by the Department of Health and Human Services for 2019, divided by 12. For workers becoming newly eligible or dying after 2020, the minimum PIA for their initial year of eligibility is increased by the growth in the national average wage index (AWI).For all affected workers, the minimum PIA is increased after their year of initial eligibility by the COLA.

See my next post for the rest of the provisions, since I am restricted with the # of characters.

Re: EASY FIX FOR SOCIAL SECURITY

If they eliminated the cap on FICA taxes, they could lower the FICA tax rate.

Not unless the benefit formula is changed for those higher income payers.

That is not true. No benefit formula change would be needed. There is already a maximum benefit that can be paid.

ChasKy53,

You really need to do some more study on the program.

The current year maximum benefit is ALWAYS figured based on the current cap.

The maximum monthly Social Security benefit at full or normal retirement age is $2,788 for 2018 and $2,861 for 2019. However, the maximum allowable benefit amount is only payable to those who had the maximum taxable earnings for at least 35 working years.

Easy answer. Change the rules. It is done all the time. That will change the actuarial analysis also. changing the FICA to end the cap would help the SS system, and as posted might lower the FICA tax rate.

You are exactly right John, it's a no-brainer. Of course Gail wouldn't think of that. A cap on benefits can be set that is plenty fair while allowing for enough more money going into SS to make it solvent indefinitely

"The only thing man learns from history is man learns nothing from history"

Re: EASY FIX FOR SOCIAL SECURITY

If they eliminated the cap on FICA taxes, they could lower the FICA tax rate.

Not unless the benefit formula is changed for those higher income payers.

That is not true. No benefit formula change would be needed. There is already a maximum benefit that can be paid.

ChasKy53,

You really need to do some more study on the program.

The current year maximum benefit is ALWAYS figured based on the current cap.

The maximum monthly Social Security benefit at full or normal retirement age is $2,788 for 2018 and $2,861 for 2019. However, the maximum allowable benefit amount is only payable to those who had the maximum taxable earnings for at least 35 working years.

Easy answer. Change the rules. It is done all the time. That will change the actuarial analysis also. changing the FICA to end the cap would help the SS system, and as posted might lower the FICA tax rate.

Re: EASY FIX FOR SOCIAL SECURITY

If they eliminated the cap on FICA taxes, they could lower the FICA tax rate.

Not unless the benefit formula is changed for those higher income payers.

That is not true. No benefit formula change would be needed. There is already a maximum benefit that can be paid.

ChasKy53,

You really need to do some more study on the program.

The current year maximum benefit is ALWAYS figured based on the current cap.

The maximum monthly Social Security benefit at full or normal retirement age is $2,788 for 2018 and $2,861 for 2019. However, the maximum allowable benefit amount is only payable to those who had the maximum taxable earnings for at least 35 working years.

Re: EASY FIX FOR SOCIAL SECURITY

SS manages a number of "stand-alone" programs. Each has its own dedicated funding source.

One of those programs has an underfunded problem? Which program?

As of now, it is the Old Age, Survivors Trust Fund since the SS Disability Trust Fund has been fixed by moving around some money (combining Trust funds) and a reduction in new SSDI claims since the Recovery has taken a strong hold.

Considered separately, the DI Trust Fund reserves become depleted in 2052 and the OASI Trust Fund reserves become depleted in 2034. In last year’s report, the projected reserve depletion year was the same for OASI and 20 years earlier (2032) for DI. The change in the reserve depletion year for DI is largely due to continuing favorable experience for DI applications and benefit awards. Disability applications have been declining steadily since 2010, and the total number of disabled-worker beneficiaries in current payment status has been falling since 2014.

. . . . . Social Security’s total cost is projected to exceed its total income (including interest) in 2020 for the first time since 1982, and to remain higher throughout the remainder of the projection period. Social Security’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2035 when the OASDI reserves will become depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2093. The ratio of reserves to one year’s projected cost (the combined trust fund ratio) peaked in 2008, generally declined through 2018, and is expected to decline steadily until the trust fund reserves are depleted in 2035.

Re: EASY FIX FOR SOCIAL SECURITY

The fact is if you consider ALL taxes, the poor (bottom 40%) pay a greater share of their income in taxes than those at the very top (1%) because income is NOT the only thing we tax.

1st you need to prove that statement because the top 1%ers or even the top 10%ers also pay additional taxes which the poor or middle class do not have to pay. Also many times this groups deductions are also limited by income on their income taxes - not so, with lower income groups.

You want to talk about the % of their income comparison but when it comes to Social Security, you want to talk about amounts and we both know who pays the larger amount - always.

Social Security is also progressive in the benefit given - the lower income earners always get more of a bang for their bucks, so to speak.